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The first resounding cannonade of George W. Bush's second-term campaign against Social Security was fired by a baby-faced aide to Karl Rove named Peter Wehner. On Jan. 3, 2005, as the New Year's Eve bunting was coming down around the nation's capital and the inauguration scaffolding was going up on the Capitol Mall, the 44-year-old Wehner drafted a bellicose memorandum to inform the administration's right-wing power base precisely where the privatization of Social Security fit in the White House's worldview.
"The debate about Social Security is going to be a monumental clash of ideas—and it's important for the conservative movement that we win both the battle of ideas and the legislation that will give those ideas life," Wehner wrote. "At the end of the day, we want to promote both an ownership society and advance the idea of limited government." The dismantling of Social Security would be the final unmaking of the New Deal: "For the first time in six decades, the Social Security battle is one we can win—and in doing so, we can help transform the political and philosophical landscape of the country. Increasingly the Democrat [sic] Party is the party of obstruction and opposition. It is the Party of the Past."
The GOP would emerge from this fray as the party of the future. "Greater opportunity, more freedom and more control for individuals over their own lives," Wehner wrote. "That is what the personal account debate is fundamentally about—and it is clearly the crucial new conservative idea in the history of the Social Security debate."
If there were any doubts that Bush's campaign against Social Security was not fiscal or economic but strictly ideological, Wehner's memo dispelled them in a stroke. But his words weren't meant for the public eye (although they were promptly leaked to the press). In its public language, the Bush campaign for Social Security reform has steered clear of the elemental ideological conflict, sticking instead to the language of economics. The magic of privatization, as President Bush would repeat often over the next few months, would save Social Security from impending bankruptcy; never was heard a single word about the goal of ensuring victory for the conservative movement in "the battle of ideas."
The White House assault on what may fairly be called the most successful federal program in U.S. history amounts to a domestic version of Operation Shock and Awe, the noisy pre-attack barrage designed to subdue the Iraqi army. As the persuader-in-chief, the president himself undertook to crisscross the country, reiterating at dozens of stage-managed events his sanctimonious regret at the obsolescence of the once grand and effective program and his determination to give it a 21st century polish.
White House front groups such as Progress for America, which claimed to represent the grass roots but was tightly linked to Rove, flexed muscles pumped up with the financial steroids of corporate donations. Progress for America signed up Thomas Saving, a pro-privatization economist who had been unaccountably appointed to the Social Security Board of Trustees by President Clinton, as a consultant and spokesman. "I already do an awful lot of speeches about Social Security and Medicare," he cheerily informed the Houston Chronicle. Perhaps wary of being thought stodgy, the organization also drafted Noah McCullough, a 9-year-old master of memorized presidential trivia, as a sort of curtain-raising act for the president's road show. ("What I want to tell people about Social Security is to not be afraid of the new plan," said young McCullough during an interview with the New York Times in February. "It may be a change, but it's a good change.")
Meanwhile, the privatization faithful converged on what one might consider the libertarian St. Peter's Basilica, the six-story postmodern Cato Institute headquarters in Washington, D.C.
On Social Security privatization, Cato is the center of the universe. For 25 years the rightist think tank has been a relentless promoter of private accounts and the fount of hundreds of white papers, book-length studies and op-eds driving the battle plan. During the second week of February this year, the institute convened a two-day conference on Social Security reform, Cato-style. "This conference isn't about 'should you privatize,' " Michael Tanner, the chairman of its Social Security task force, told me when, perhaps naively, I asked him why there wasn't a single privatization skeptic, much less an opponent (or a Democrat), listed among the more than two dozen speakers. "We wanted a discussion within the family about how to do it, not to get into another debate about whether we should do it."
Tanner is an earnest man with a receding hairline, a silver and black goatee and a jeweled stud glinting incongruously from his left earlobe. If there's a benign face of privatization, it's his. Tanner is most at ease making philosophical arguments, not engaging in ad hominem fisticuffs. One rarely finds him predicting the extermination of the Democratic Party, sliming the AARP (the senior citizens lobby that has been a tireless opponent of privatization) or engaging in any of the other White House dirty tricks that threaten to turn Social Security reform into another of Rove's scorched-earth crusades.
Tanner's role as Cato's Social Security spearhead dates to 1995. Cato had established its episcopate over privatization years earlier by publishing a series of tracts and strategy memos airing ideas for undermining public support for the program. For much of that period, it looked like an uphill battle. The program's staunchest supporters, the middle class and elderly, also were its most cohesive voting bloc. Then the weather began to change.
Tanner believes the turning point came about 1994, when an advisory council appointed by Clinton acknowledged, for the first time, that private retirement accounts carved out of the Social Security payroll tax might be worth considering. The panel was too fragmented to actually deliver a legislative proposal, but conservatives were encouraged that a majority of its members had endorsed, in principle, one or the other of the two private account solutions it had reviewed. Tanner is convinced that Clinton was about to propose individual accounts carved out of Social Security in 1998, until the Monica Lewinsky scandal knocked it off track.
"Why would that have had anything to do with it?" I asked him.
"He had to move to the left," he replied. In fact, there's no evidence that Clinton was preparing to propose anything like a diversion of payroll tax revenues to private accounts. The most Clinton is known to have considered was an add-on option granting tax deductions and possibly a federal subsidy for voluntary accounts designed to complement, not replace, Social Security.
The year 2001 brought grave disappointment to the privatization faithful. President Bush had appointed a reform commission, screening its members in advance to ensure that each one advocated private accounts. The goal was for it to issue a pro-privatization legislative blueprint for the following congressional session. But Sept. 11 intervened. When the commission issued its final report two months later, official Washington responded with almost total silence. Domestic policy was stricken from the president's agenda for the next three years.
Impelled by its own momentum but functioning in a vacuum, Cato continued to press the issue. In 2002, a year in which the Social Security debate was drowned out by the waging of one overseas war and preparations for another, Cato bravely soldiered on with 11 conferences and other events. From Tanner's descriptions I imagined desultory gatherings attended by a few true believers. The experience seemed to have marked him; he sounded like a general who, having had victory slip from his grasp many times before, finally sensed the prize within reach—but still feared that something might go wrong.
For the record, he assured me that the prospects for private accounts looked bright. The White House had signaled that Bush wasn't going to back off from Social Security reform this time—he was going to stump for privatization for two months straight, until the nation was behind him. Lobbying groups had announced plans to drum up as much as $100 million in cash for television advertising. "I'm stunned at the level at which they're treating this," Tanner said of the White House. "They're pulling out all the stops. It's going to be virtually like a presidential campaign." Cato, naturally, would be in the thick of it. "We see our role as providing intellectual ammunition for the debate," he said.
He also left no room for doubt that Cato, like Peter Wehner, saw the issue in terms of ideology, not economics—as a classic battle to promote libertarian ideals hostile to the very principle of social insurance. "In the end, this isn't a debate about the system's solvency in 2018 or 2042," he told me, mentioning the years in which, according to Social Security doomsayers, the system's fiscal health would start to ebb, then collapse. "It's about whether you think the government should be in control of your retirement or people should take ownership and responsibility. That's why the debate is so intense—why would anyone get so excited about transition costs? This is about whether we redefine a relationship between individuals and government that we've had since 1935. We say that what was done was wrong then, and it's wrong now. Our position is that people need to be responsible for their own lives."
The next morning, a chilly Tuesday in Washington, Edward H. Crane, Cato's burly founder and chairman, stepped to the podium in the institute's Frederick A. Hayek Auditorium (named for a hero of laissez-faire economics) to open the conference. The audience filled the 300-seat hall and overflowed into the foyer outside, where a bank of chairs was set up in front of a closed-circuit TV screen.
The conference program all but glowed with the light of a galaxy of privatization stars. The first day's keynote was delivered by Martin Feldstein, the academic patriarch of privatization. Five GOP lawmakers were to deliver a tag-team assessment of the prospects for legislation on Capitol Hill. A sixth Republican, Sen. Rick Santorum of Pennsylvania, was to deliver the second-day luncheon address, the obligatory tub-thumping attack on the Democratic Party, which he would describe as so wrong-headed in its determination to confound the public's wishes that it risked being hounded into extinction by an outraged electorate.
"The debate about Social Security is going to be a monumental clash of ideas—and it's important for the conservative movement that we win both the battle of ideas and the legislation that will give those ideas life," Wehner wrote. "At the end of the day, we want to promote both an ownership society and advance the idea of limited government." The dismantling of Social Security would be the final unmaking of the New Deal: "For the first time in six decades, the Social Security battle is one we can win—and in doing so, we can help transform the political and philosophical landscape of the country. Increasingly the Democrat [sic] Party is the party of obstruction and opposition. It is the Party of the Past."
The GOP would emerge from this fray as the party of the future. "Greater opportunity, more freedom and more control for individuals over their own lives," Wehner wrote. "That is what the personal account debate is fundamentally about—and it is clearly the crucial new conservative idea in the history of the Social Security debate."
If there were any doubts that Bush's campaign against Social Security was not fiscal or economic but strictly ideological, Wehner's memo dispelled them in a stroke. But his words weren't meant for the public eye (although they were promptly leaked to the press). In its public language, the Bush campaign for Social Security reform has steered clear of the elemental ideological conflict, sticking instead to the language of economics. The magic of privatization, as President Bush would repeat often over the next few months, would save Social Security from impending bankruptcy; never was heard a single word about the goal of ensuring victory for the conservative movement in "the battle of ideas."
The White House assault on what may fairly be called the most successful federal program in U.S. history amounts to a domestic version of Operation Shock and Awe, the noisy pre-attack barrage designed to subdue the Iraqi army. As the persuader-in-chief, the president himself undertook to crisscross the country, reiterating at dozens of stage-managed events his sanctimonious regret at the obsolescence of the once grand and effective program and his determination to give it a 21st century polish.
White House front groups such as Progress for America, which claimed to represent the grass roots but was tightly linked to Rove, flexed muscles pumped up with the financial steroids of corporate donations. Progress for America signed up Thomas Saving, a pro-privatization economist who had been unaccountably appointed to the Social Security Board of Trustees by President Clinton, as a consultant and spokesman. "I already do an awful lot of speeches about Social Security and Medicare," he cheerily informed the Houston Chronicle. Perhaps wary of being thought stodgy, the organization also drafted Noah McCullough, a 9-year-old master of memorized presidential trivia, as a sort of curtain-raising act for the president's road show. ("What I want to tell people about Social Security is to not be afraid of the new plan," said young McCullough during an interview with the New York Times in February. "It may be a change, but it's a good change.")
Meanwhile, the privatization faithful converged on what one might consider the libertarian St. Peter's Basilica, the six-story postmodern Cato Institute headquarters in Washington, D.C.
On Social Security privatization, Cato is the center of the universe. For 25 years the rightist think tank has been a relentless promoter of private accounts and the fount of hundreds of white papers, book-length studies and op-eds driving the battle plan. During the second week of February this year, the institute convened a two-day conference on Social Security reform, Cato-style. "This conference isn't about 'should you privatize,' " Michael Tanner, the chairman of its Social Security task force, told me when, perhaps naively, I asked him why there wasn't a single privatization skeptic, much less an opponent (or a Democrat), listed among the more than two dozen speakers. "We wanted a discussion within the family about how to do it, not to get into another debate about whether we should do it."
Tanner is an earnest man with a receding hairline, a silver and black goatee and a jeweled stud glinting incongruously from his left earlobe. If there's a benign face of privatization, it's his. Tanner is most at ease making philosophical arguments, not engaging in ad hominem fisticuffs. One rarely finds him predicting the extermination of the Democratic Party, sliming the AARP (the senior citizens lobby that has been a tireless opponent of privatization) or engaging in any of the other White House dirty tricks that threaten to turn Social Security reform into another of Rove's scorched-earth crusades.
Tanner's role as Cato's Social Security spearhead dates to 1995. Cato had established its episcopate over privatization years earlier by publishing a series of tracts and strategy memos airing ideas for undermining public support for the program. For much of that period, it looked like an uphill battle. The program's staunchest supporters, the middle class and elderly, also were its most cohesive voting bloc. Then the weather began to change.
Tanner believes the turning point came about 1994, when an advisory council appointed by Clinton acknowledged, for the first time, that private retirement accounts carved out of the Social Security payroll tax might be worth considering. The panel was too fragmented to actually deliver a legislative proposal, but conservatives were encouraged that a majority of its members had endorsed, in principle, one or the other of the two private account solutions it had reviewed. Tanner is convinced that Clinton was about to propose individual accounts carved out of Social Security in 1998, until the Monica Lewinsky scandal knocked it off track.
"Why would that have had anything to do with it?" I asked him.
"He had to move to the left," he replied. In fact, there's no evidence that Clinton was preparing to propose anything like a diversion of payroll tax revenues to private accounts. The most Clinton is known to have considered was an add-on option granting tax deductions and possibly a federal subsidy for voluntary accounts designed to complement, not replace, Social Security.
The year 2001 brought grave disappointment to the privatization faithful. President Bush had appointed a reform commission, screening its members in advance to ensure that each one advocated private accounts. The goal was for it to issue a pro-privatization legislative blueprint for the following congressional session. But Sept. 11 intervened. When the commission issued its final report two months later, official Washington responded with almost total silence. Domestic policy was stricken from the president's agenda for the next three years.
Impelled by its own momentum but functioning in a vacuum, Cato continued to press the issue. In 2002, a year in which the Social Security debate was drowned out by the waging of one overseas war and preparations for another, Cato bravely soldiered on with 11 conferences and other events. From Tanner's descriptions I imagined desultory gatherings attended by a few true believers. The experience seemed to have marked him; he sounded like a general who, having had victory slip from his grasp many times before, finally sensed the prize within reach—but still feared that something might go wrong.
For the record, he assured me that the prospects for private accounts looked bright. The White House had signaled that Bush wasn't going to back off from Social Security reform this time—he was going to stump for privatization for two months straight, until the nation was behind him. Lobbying groups had announced plans to drum up as much as $100 million in cash for television advertising. "I'm stunned at the level at which they're treating this," Tanner said of the White House. "They're pulling out all the stops. It's going to be virtually like a presidential campaign." Cato, naturally, would be in the thick of it. "We see our role as providing intellectual ammunition for the debate," he said.
He also left no room for doubt that Cato, like Peter Wehner, saw the issue in terms of ideology, not economics—as a classic battle to promote libertarian ideals hostile to the very principle of social insurance. "In the end, this isn't a debate about the system's solvency in 2018 or 2042," he told me, mentioning the years in which, according to Social Security doomsayers, the system's fiscal health would start to ebb, then collapse. "It's about whether you think the government should be in control of your retirement or people should take ownership and responsibility. That's why the debate is so intense—why would anyone get so excited about transition costs? This is about whether we redefine a relationship between individuals and government that we've had since 1935. We say that what was done was wrong then, and it's wrong now. Our position is that people need to be responsible for their own lives."
The next morning, a chilly Tuesday in Washington, Edward H. Crane, Cato's burly founder and chairman, stepped to the podium in the institute's Frederick A. Hayek Auditorium (named for a hero of laissez-faire economics) to open the conference. The audience filled the 300-seat hall and overflowed into the foyer outside, where a bank of chairs was set up in front of a closed-circuit TV screen.
The conference program all but glowed with the light of a galaxy of privatization stars. The first day's keynote was delivered by Martin Feldstein, the academic patriarch of privatization. Five GOP lawmakers were to deliver a tag-team assessment of the prospects for legislation on Capitol Hill. A sixth Republican, Sen. Rick Santorum of Pennsylvania, was to deliver the second-day luncheon address, the obligatory tub-thumping attack on the Democratic Party, which he would describe as so wrong-headed in its determination to confound the public's wishes that it risked being hounded into extinction by an outraged electorate.
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